Chapter 9 Flashcards
only available choices for small and new firms wanting to go international, permits larger firms to begin international expansion with minimum investment and risk, permits easy access to overseas markets
export/import
overseas operation that is totally owned and controlled by an MNC, prohibited in many newly developing countries as some countries, faces high risk with large investments in one area
wholly owned subsidiary
cross-border purchase or exchange of equity involving two or more companies, opted by MNCs to quickly expand resources or construct high-profit products in a new market, cultural differences and time constraints are the major barriers, transition costs pose a problem
mergers and acquisitions
any type of cooperative relationship among different firms
alliance
agreement under which two or more partners own or control a business
joint venture
when joint venture partners are from different countries
international joint venture
agreement that allows one party to use an industrial property right in exchange for payment to the owning party
licensing
when is licensing used
product is in the mature stage
foreign countries require firms to make direct investment
is a small firm lacking financial and managerial resources
one party permits another to operate an enterprise using its trademark, logo, product line, and methods of operation in return for a fee
franchising
common organizational arrangement for operations that require an on-site presence from the start
subsidiary
set up because of the pressure by the local governments when overseas sales increase, help reduce transportation costs
on-site manufacturing operations
common first choice among manufacturing firms, especially those with technologically advanced products, allows firms to reduce risk and size of investment
export arrangement
structural arrangement that handles all international operations out of a division. adopted by firms that are in developmental states of international business operations
international division structure
focuses on greater expansion and integration among international operations
global structure arrangements
Structure under which domestic divisions are given worldwide responsibility for product groups
global product division
Structure under which global operations are organized on a geographic basis rather than a product basis
global area division
Structure that organizes worldwide operations primarily based on function and secondarily on product
Global functional division
combination of global product, area, or functional arrangement
mixed organization structures
advantage of mixed organization structure
allow org to create the specific type of design that best meets its needs
disadvantage of mixed organization structure
coodinating the personnel and getting everyone to work toward common goals is difficult
combine elements of function, product, and geographic designs, while relying on network arrangements to link worldwide subsidiaries, help MNCs make use of global economies of scale, have nodes at their centers
transnational network structures
units charged with coordinating product, functional, and geographic details
nodes
individuals who work on an product for a company, usually via the internet, and move on to other employment when the assignment is done
electronic freelancers
electronic freelancers, delivers outsourcing functions online, different version of the matrix design
electronic network organization
